Poor GDP growth in late 2000 due to high interest rates and weak demand

GDP grew by 2.5% in the fourth quarter of last year, according to a government communiqué yesterday. The rate for the year as a whole reached 4.2%, barely exceeding the 1999 level, resulting mainly from high interest rates and weakening domestic demand. Low GDP growth affected budget revenues, which were lower than expected by zl.137 million. However, since budget expenses were limited as well, the deficit did not exceed the predicted zl.15.4 billion, constituting 2.2% of GDP. Concern was voiced about the 15% unemployment rate. Among the good news was declining inflation and a recovery of foreign trade. The Main Statistical Office (GUS) reported that exports last year exceeded those in 1999 by nearly 15.5%, decreasing the current account deficit from 7.5% to 7%. 'Thanks to high currency reserves of $26.5 billion, exceeding 7 months of import expenses, [...] such C/A deficit does not threaten the state's financial stability,' the statement emphasized. (Gazeta Wyborcza, p.22) M.K.